Business Insights | Understanding mandatory climate related financial disclosures

Sustainability reporting solutions

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In Australia, the built environment is responsible for roughly one-fifth (20%) of all national emissions, with commercial buildings alone contributing a significant portion of these emissions. Office, retail and industrial assets are facing heightened investor and tenant scrutiny as NABERS and Green Star ratings become embedded in valuation and leasing decisions.

How mandatory disclosures impact commercial real estate

What?
In September 2024, the Australian Government passed the Treasury Laws Amendment Bill, mandating large and medium-sized companies to report on climate-related risks, opportunities, and greenhouse gas emissions. Disclosed sustainability data must meet Australian Sustainability Reporting Standards (ASRS) assurance requirements. This legislation aligns with International Financial Reporting Standards.

When?
The reporting period for the largest companies started on January 1, 2025. They must report their first full financial period after this date, with initial disclosures due in 2026.

Who?
Large listed and unlisted entities under the Corporation Act that meet two of the three specified criteria must report, impacting commercial real estate owners, developers and occupiers. Asset owners with $5 billion in assets under management (AUM) fall into Group 2 and must report by the end of FY 2027 – as outlined in the table below:

This table outlines the reporting thresholds for different groups, specifying the first annual reporting periods, required employee numbers, consolidated gross assets, consolidated revenue, National Greenhouse and Energy Reporting (NGER) status, and asset owner criteria.

This table outlines the reporting thresholds for different groups, specifying the first annual reporting periods, required employee numbers, consolidated gross assets, consolidated revenue, National Greenhouse and Energy Reporting (NGER) status, and asset owner criteria.

Source: treasury.gov.au Mandatory climate-related financial disclosures, Policy Position Statement

This legislation affects the majority of companies in Australia. Companies in Group 1 must disclose in 2026 and should start preparing now. This includes assessing both physical and transition climate-risk exposure across the value chain, creating an emissions inventory, and analysing supply chain readiness. Early movers in the property sector are already leveraging disclosure readiness to differentiate assets in capital markets, as highlighted in CBRE’s Australian Real Estate Market Outlook.

Why it matters

This legislation promotes consistency, transparency, and comparability in sustainability reporting. For Australia, it’s a critical step on the journey to net zero by 2050. For property stakeholders, it’s a signal: your climate exposure, data, and governance structures will now be under scrutiny.

Cutting through complexity

Navigating dynamic and challenging market conditions becomes even more complex when new regulations are introduced, particularly for organisations whose core business is not real estate.

We’ve simplified the steps into a practical pathway:

1. Determine if you are in scope and your reporting timeline

The first step for property owners, developers and occupiers is to confirm your disclosure group and when to start reporting. Timelines vary, but clarity here determines the urgency of your compliance planning and data capture.

Group 1

Data capture: Start of your financial year in 2025
First report due: 2026 at the end of your financial year

Group 2

Data capture: Start of your financial year after 1 July 2026
First report due: 2027 at the end of your financial year

Group 3

Data capture: Start of your financial year after 1 July 2027
First report due: 2028 at the end of your financial year

2. Assess your current position

For real estate owners and occupiers, disclosure readiness starts with understanding how climate impacts and opportunities are integrated into governance, strategy, risk, and performance. These lenses provide a practical baseline to identify gaps and prepare portfolios for compliance and long-term value.

Insight: CBRE’s 2023 Investor Intentions Survey found that 60% of institutional investors in Australia apply a green premium or brown tax when assessing office and industrial transactions - making climate governance a financial as well as a compliance imperative.

Do board members and executive staff members have oversight of climate-related elements impacting your organisation?
Are climate factors considered in executive remuneration?
How is climate risk considered in key decisions?

Insight: In real estate, climate strategy is not abstract: NABERS Energy and Green Star performance now directly influence leasing demand, operating costs, and capital value. CBRE research shows assets with higher ratings consistently outperform in both occupancy and valuation uplift.

Have we tested our strategy under different climate scenarios?
Do we understand the impacts on, and opportunities for, assets, operations and supply chains?

Insight: Physical climate risks are particularly acute for Australian property portfolios: CBRE climate risk analysis highlights that industrial and logistics assets in flood-prone corridors are already facing rising insurance costs and asset resilience capex requirements.

Are climate risks embedded in our enterprise risk framework?
Are they evaluated under relevant climate scenarios and reviewed regularly?
Have we identified any mitigation strategies within our assets (for example current performance and future resilience), operations and supply chains (for example alternative sources, reliance on products and services)?

Insight: For landlords and developers, disclosure is best anchored in existing frameworks. NABERS, GRESB and Climate Active benchmarks are already embedded in market practice and valuation models, creating a ready-made baseline for ASRS-aligned reporting.

Are we measuring Scope 1, 2 and 3 emissions? Do we have any data collection gaps?
Have we set clear targets and defined our emissions boundary?

Insight: According to the Property Council of Australia, 9 in 10 institutional investors now require evidence of ESG reporting capability before allocating capital to property funds. For commercial real estate owners, having systems and processes aligned to ASRS isn’t just compliance—it’s an enabler of ongoing capital access and tenant demand.

Do we have processes, systems and data to meet legislative requirements?
Are we ready to report with confidence and credibility?

3. Start collecting data

For commercial real estate, disclosure begins at the asset level. Collecting accurate Scope 1, 2 and 3 emissions data across buildings and value chains creates the foundation for credible reporting and positions assets for long-term resilience and value.

Compile information required to calculate an organisational carbon account (total greenhouse gas [GHG] emissions) by scope:

Scope 1: Emissions from directly burning fossil fuels on-site
Scope 2: Emissions created off-site from purchased electricity/power
Scope 3: Indirect upstream or downstream emissions relating to business activities such as purchasing, transportation, product use, disposal and investments that generate emissions outside a company’s direct control but within its value chain.

Disclosed sustainability data must meet Australian Sustainability Reporting Standards (ASRS) assurance requirements. This ensures it is accurate, consistent, and traceable with links to source data for auditors, supports regulatory compliance, enables efficient reporting, and scales with increasing legislated assurance requirements.

Pro tip: While some data platforms are designed to track emissions across an organisation’s value chain, they often fall short when it comes to the unique demands of real estate. Maximising value and ensuring readiness for regulatory reporting requires a solution that’s purpose-built to optimise the sustainability performance of physical assets and to unlock long-term property value.

We’ll guide you through the data deep dive

Mandatory climate disclosures require a focus on accurate data and a comprehensive approach to climate risk and opportunity analysis - disciplines that many organisations are still building. In practice, this means integrating asset-level metrics already familiar to real estate owners - NABERS, Green Star, Climate Active, and GRESB - into ASRS-aligned reporting frameworks. Our experts bring technical mastery, regulatory understanding, and real estate specific insights to help you report with confidence. Below are the key data points required to report:
This diagram outlines an organisation's carbon accounting requirements under Australian Sustainability Reporting Standards (ASRS), detailing utility data for landlords and occupiers, supply chain emissions (upstream and downstream), climate risk considerations, and additional data points such as internal carbon pricing and climate-linked remuneration.

This diagram outlines an organisation's carbon accounting requirements under Australian Sustainability Reporting Standards (ASRS), detailing utility data for landlords and occupiers, supply chain emissions (upstream and downstream), climate risk considerations, and additional data points such as internal carbon pricing and climate-linked remuneration.

How CBRE can help

Our sustainability professionals have the expertise to contextualise Australia’s mandatory disclosures in a complex global regulatory landscape for your portfolio or asset and get you ready for compliance.

Aligning with ASRS: Strategy and its resilience under different climate scenarios

Our Net Zero Carbon Pathways service helps you understand your current emissions trajectory and develop actionable, costed strategies to meet net zero targets—integrated with lifecycle insights from our Building Consultancy experts.

Aligning with ASRS: Risk management processes

Through advanced Climate Risk Assessments, we identify and quantify your assets’ exposure to physical climate risks, enabling proactive mitigation and portfolio resilience planning.

Aligning with ASRS: Metrics and targets, including Scope 1, 2, and 3 emissions

Our emissions reporting experts provide end-to-end support—from carbon accounting and Climate Active submissions to Scope 3 strategy and data platform integration—ensuring your disclosures are accurate and auditable.

Aligning with ASRS: Metrics and targets, including Scope 1, 2, and 3 emissions

Through our partnership with Deepki, CBRE Property Management automates Sustainability data collection, enhances visibility with smart metering, and simplifies reporting – empowering landlords to track progress and meet assurance standards.

We’ve got you

As a single-source provider of comprehensive solutions – from planning to execution – we simplify complexity, mitigate risk and enable operational improvements and investments that create value at scale.

Our team includes accredited professionals in GRESB, WELL, climate disclosure frameworks (ISSB/ASRS/TCFD), net zero strategy, and ESG data systems, bringing global standards and local insights together to deliver practical, high-impact solutions.

We work in close partnership with CBRE’s market-leading Property Management team, who implement and manage Sustainability data platforms and day-to-day operational programs.

Talk to our Sustainability Solutions team today.

Business Insights | Understanding mandatory climate related financial disclosures

The built environment is responsible for roughly 20% of Australia’s emissions. It’s why real estate owners across office, retail and industrial assets need to understand how to address sustainability ratings as it becomes embedded in valuation and leasing decisions.

Sustainability reporting solutions

How mandatory disclosures impact commercial real estate

Why it matters

Cutting through complexity

1. Determine if you are in scope and your reporting timeline

2. Assess your current position

Governance

Strategy

Risk Management

Metrics and Targets

Readiness and Capability

3. Start collecting data

We’ll guide you through the data deep dive

How CBRE can help

Strategic Climate Resilience Planning

Climate Risk Intelligence

Emissions Accounting & Target Setting

Real-Time Sustainability Performance Management

We’ve got you

Sustainability Solutions

The built environment is responsible for roughly 20% of Australia’s emissions. It’s why real estate owners across office, retail and industrial assets need to understand how to address sustainability ratings as it becomes embedded in valuation and leasing decisions. 